China and the World of Business • China Business and the World

There’s not a whole lot more to be written about the entire Dell fiasco at this point, except to say that the crisis has occurred and Dell has responded (although as Fons correctly points out, it DID take an article in BusinessWeek to get them to do so.)

Steve Rubel pats Dell on the back for doing a “nice job” responding to user complaints on its blog. If I were him, I’d hold off on the kudos. It is way too early to tell whether or not Dell’s response was adequate, whether it was “too little, too late,” or, as ImageThief and I discussed at lunch yesterday, whether it was even sufficiently culturally sensitive to make a real difference.

Charles Wolf (no relation), an analyst for Still, Needham & Company, says the issue will blow over in a few weeks, and that it might have a “nominal” negative impact on Dell’s reputation in China. I have a lot of respect for Charlie Wolf, but I’d really like to know what he bases that on.

With respect to these esteemed voices, I think they underestimate the severity of the issue. Unlike the part of the planet where they both ply their trades, memories are long here in China, and locals are in no rush to forgive a company that transgresses. This applies double for foreign companies who have viable local competitors. Toshiba was once a leading brand name in laptops in China. Since bungling a similar issue seven years ago, it’s reputation is shot among computer consumers and its business has suffered as a result.

The telling point for Dell here will be how it behaves going forward. It has an opportunity to regain some squandered trust, but it will do so only if it recognizes something Rubel apparently missed – the battle to rebuild its image among China’s increasingly sophisticated, choosy, and nationalistic computer buyers is far from over.